What is a KPI?

KPI stands for key performance indicator. The words already say that it is about key figures: not all the figures you can measure, but the few that show whether you are on course. A company with twenty figures does not know what to look at. A company with five chooses sharply.

A good KPI has three qualities. It belongs to a goal you really have. It is unambiguous: everyone calculates it the same way. And it can be influenced: your team can do something about it. The number of website visitors is a figure. The share of quotes that become an order is a KPI, because you can improve it.

In sales, common KPIs are the value of the pipeline, the percentage of quotes that become an order and the time from first contact to order. In customer service they are the time to the first reply and the number of open questions. In a project it is the ratio between planned and worked hours. Which ones suit you depends on your company.

Start with few. Choose one or two KPIs per department, decide who supplies the figures and agree when you look at them. Put them on a dashboard, so you do not have to calculate them yourself every time. The figures come from your programs, such as your CRM. How you collect and combine them is the field of business intelligence.

Make sure the KPI matches the set-up. A deal percentage is only reliable if everyone uses the stages of the pipeline the same way. That is one reason why, in a set-up, we first fix the stages and fields and only then build reports. For analysis across several programs, look at Zoho Analytics.